China is years ahead of other major countries in the development of digital currency, the digital yuan

China is several years ahead of other major economies in its efforts to develop a central bank digital currency and, in doing so, could increase its global influence, Chainalysis executive Ulisse Dell’Orto told CNBC in an interview Monday.

Dell’Orto, who is managing director of Asia Pacific & Japan at data platform Chainalysis, spoke about how China’s efforts to turn its legal tender to a “computer code” means it’s on track to widely roll out a digital version of its currency any minute, while other countries like the United States or the United Kingdom are still in the very early stages of exploring official digital coins of their own.

“The rapid deployment of the digital yuan will basically enable China to expand its global influence. They have been pioneering CBDCs, leaving some of the largest powers in the world several years behind,” Dell’Orto told CNBC.

China is the only developing nation that has released a national rollout of their own central bank digital currency (CBDC), Dell’Orto said. China was the first major nation to run a trial of its digital yuan, in which it handed out $6.2 million in the token to residents via mobile apps in June.

In parts of Europe, like Switzerland and France, there have been some digital currency pilots, as well as a number of initiatives across southeast Asia. The Bahamas, for example, has already issued a CBDC – named the Sand dollar.

CBDCs are a digital form of a central bank’s national currency that could offer users a safer, centralized alternative to standard cryptocurrencies like bitcoin, which are often highly volatile.

The rise in popularity of cryptocurrencies, which are decentralized and not subject to any government or authority, afford their users a degree of flexibility and anonymity. Central banks are looking at CBDCs as a means of keeping currency in circulation – which would include a digital version – in public, rather than private, hands to continue to ensure the stability of the financial system.

Dell’Orto said a digital yuan could facilitate trade between China and many of its international trade partners, such as those involved in its so-called “Belt and Road” infrastructure program – a multi-billion dollar project aimed at connecting trade routes between China and over 100 other countries by land and sea.

“If we’re only simply looking at the Belt and Road Initiative, it could definitely be a digital currency that could be used and traded with their partners. So I think that this will have a very important impact on China’s policy, and this is why China’s trying to roll out its currency as soon as possible,” he said in the interview.

Camomile Shumba, BusinessInsider

This news was first published by BusinessInsider